Matsushita Electric, 'father of lifetime employment' now wants 5,000 to quit

Matsushita Electric Industrial Co., an Osaka-based major home electric
appliance maker, will begin recruiting 5,000 early retirees from September.
Akahata of August 6 ran a story of the company contradicting its claimed as
the "father of lifetime employment."

At present, about 80,000 people are working for Matsushita Electric and
related companies. Employees age 58 or less who have worked for 10 years or
more are now asked to apply for early retirement.

A 57-year-old employee, who has worked for the company for over 30 years,
said to the Akahata reporter: "An extra payment for retiring earlier than
mandatory retirement age won't pay for my livelihood in the future.
Increased production in China and other countries means less jobs at home."


A 47-year-old worker said, "The company talks about the problem of
'redundancy, which is not the case with my workshop."

Matsushita Electric on July 31 published its consolidated accounting for
the April-June quarter, which for the first time showed a deficit of 38.7
billion yen (0.3 million dollars). The company's public relations department
said that the deficit should be attributed to the sharp decline in the sale
of IT-related products, including mobile phones and personal computers.

"Recruiting early retirees" is a major step that the company has proposed
in order to tide over the deficit-ridden operation. Under the system,
two-and-half years' income as a maximum can be added to the retirement
allowance.

Before the company published its consolidated report, it presented the
Japanese Electrical Electronic & Information Unions (Denki Rengo), with an
internal document,

The document explained that redundancy is a result of increasing
production abroad seeking cheap labor as part of cost-cutting efforts to
increase international competitiveness.

In fact, the financial report shows that 51 percent of Matsushita
Electric's earnings came from its production and sales abroad.

Murayama Atsushi, vice president of Matsushita Electric, was outspoken
when he talked about the company strategy: "In the 1980s, we were boastful
of our excellent performance with the profit rate at around 10 percent. In
the 1990s, a low-profit structure persisted, and in 1999 the situation
became critical."

He went on to say, "If the company continues to seek the optimum
conditions for production abroad, there will be more domestic redundancy and
personnel related to the distribution of goods will be unnecessary." In
contrast to other electric appliance makers which dismissed workers,
Matsushita Electric announced that there would be no dismissals, but would
enforce wage cuts.

Thereafter, personnel costs were reduced in a variety of ways, including
a change in labor contracts with every department, introducing a system of
locally-limited employees (not subject to transfer, with wage levels at 85
percent of general employees), a new wage system (different base wage
ceilings according to job groups, which resulted in a zero wage hike in the
2001 spring struggle), and a review of the retirement allowance system
(counting in merit factors).

"Early retirement" recruitment is tantamount to a "soft" dismissal
designed to increase the company's profit rate.

This strategy is what the Koizumi Cabinet is hailing as a model for
"corporate restructuring." Under the heading of "increased labor mobility,"
the government encourages major corporations to part with regular employees
and rehire them as a contingent work force which is made up of part-timers,
subcontracted workers, and temporary workers. The pain of unemployment is
being imposed only on the worker, because the employer is free to dismiss
him/her and the worker is no longer protected by lifetime unemployment.

A survey by Rengo (Japanese Trade Union Confederation)-Osaka to which
Matsushita Electric belongs shows that 44 percent of workers are forced to
work overtime without pay. If this practice is abolished, a greater number
of workers will be needed.

In fiscal 2000, a Matsushita Electric worker on average worked 190 hours
overtime. The calculated 5,000 workers in "redundancy" is based on the
premise that every worker should work 190 hours overtime. If overtime work
is abolished, jobs for 7,000 people will appear, and there will be no need
to force early retirement.

The company's deficit of 38.7 billion yen in the consolidated accounting
amounts to only 1.5 percent of the company's hoarded internal reserves of
2.6 trillion yen (21 billion dollars). (end)